With just days away from a December 1st effective date, a federal judge in Texas has issued a temporary injunction to put the brakes on overtime reform.
As you may recall, twenty-one states filed an emergency motion in October for a preliminary injunction to halt the new rule claiming that the Department of Labor had exceeded its authority by raising the salary threshold too high and providing automatic threshold adjustments every three years. The new overtime rules were set to more than double the current threshold from $23,660 to $47,476. “A preliminary injunction preserves the status quo while the court determines the department’s authority to make the final rule as well as the final rule’s validity,” said Judge Amos Mazzant of the U.S. District Court for the Eastern District of Texas in a Nov. 22 ruling.
What does this mean? The overtime rule will not take effect as planned on December 1st, but it could still be implemented at a later date. Officials are expected to make a permanent ruling after Thanksgiving.
How should employers proceed from here? Here are two recommended options:
- Leave the changes intact, pending a permanent ruling, or
- Revert employees back to their old compensation structure, then make changes accordingly with the permanent ruling.
Companies who have not yet made changes can hold tight, pending the outcome of this case.
To read more on what to do next, visit SHRM’s website: The Overtime Rule Has Been Blocked. Now What?
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